Category Archives: India

The #MI3 – #Xiaomi android phone is not for those with a corporate account (Exchange)

I bought the Mi3 after a lot of deliberation 2 weeks ago. I currently have a Windows phone and always keep a spare since I go back and forth from Bangalore and Seattle.

My previous Android phone was the Google Nexus. I have had a iPhone 4S as well.

My overall basic impression: This is not the phone for me. I am ready to sell it to anyone that wants it.

I had a chance to see the phone in action 3 weeks ago when 2 other folks at the accelerator bought it. It is EXTREMELY light. It has a gorgeous display and I had heard so many good things about it that I was tempted to buy it.

It is a very well made device. Fast and sharp, if you in the market for an Android phone and have bought into the Google ecosystem (use Gmail, Google Maps, etc.)

The 3 most important things to me are consistent access to email (I have an Exchange and a POP3 account), long battery life (my other phones dont last an entire day) and reliable phone (good signal, loud enough with a headset). I use very few apps except to post to FB and Twitter and some minimal reading (Feedly).

Unfortunately these are the only things that this phone absolutely does poorly. In fact it is so bad that I am tempted to go back to my Galaxy Nexus (which is very slow).

First: email. As I mentioned, I have Exchange and our corporate policy requires encryption of the phone to access email. That does not work with MIUI. After 5 restarts and 4 hard resets, I still dont have my Exchange email. Which also means my calendar is not available. It is a known bug according to Xiaomi and there is no ETA on the fix.

The work around is I downloaded another email client, which seems to work, but my contacts and calendar on Exchange still dont sync. That absolutely is a deal breaker for me.

Second: Long battery life. It is much better than my Nokia 820, but the phone heats up quite a bit when you use it for over 2 hours (especially when you use maps). It is definitely much hotter than my 820 or the Galaxy Nexus. The battery has not lasted an entire day of normal usage. Disappointing.

Finally: I need a good phone. I tend to be on calls for over 2 hours daily. This is very weird. When I call my voicemail, the screen freezes. The phone still works, but the screen just wont turn on. It is absolutely impossible to do anything after that other than restart the phone. I had 7 voice mails to go through and they are still stuck without the ability to delete them.

If you need a good phone and dont work for a large company with Microsoft Exchange, etc. this would work, but there are cheaper phone that do the job as well.

The rise of student entrepreneurship in India #tatafirstdot and NEN

Today I had the opportunity to hang out with 1000+ student entrepreneurs from over 60+ cities and all states in India at the NEN #tatafirstdot event in RV College of engineering. The twitter buzz gives you an indication of the event’s energy.

NEN has been promoting student entrepreneurship for over a decade now and this was my 3rd event. They do a terrific job of turning the raw energy and talent of students into some great startups. The first dot event had 500+ students applications. Students from Srinagar (Jammu and Kashmir) to Kanyakumari (Tamil Nadu) participated and this time they had to present fully formed products / prototypes, not just business plans.

To set some context, in 2008, less than 1% of startups in all ventures were founded by students straight out of college. This year, that number is close to 3%. The number of startups has risen 3-fold during this period. We have over 20 Microsoft Innovation Center’s at various colleges in India that focus their effort on supporting great student entrepreneurs as well. These center’s serve to host hackathons, conduct entrepreneurship classes and encourage students and faculty to pursue building companies instead of “getting a job”.

I had a few questions from NDTV (Bala) at the sidelines of the event. One question stood out as something that needs more explanation and commentary.

“Why is it important for us to have more student entrepreneurs as a startup ecosystem”?

There are 3 main reasons why I am so passionate about student entrepreneurs:

1. Their “lack of experience” is a HUGE advantage. Most folks tend to think that experience is a good thing in entrepreneurship. I am a contrarian. I believe that experience (other than the experience being an entrepreneur) holds you back as an entrepreneur. Older and more experienced entrepreneurs are more in number, they are more successful, but they do not create disruptive companies. (p.s. I dont have data to prove this, just anecdotes) They see a problem, they solve the problem and become successful. Student entrepreneurs see something and are willing to question why? They refuse to look at the “current lay of the land” and find ways to operate within the constraints.

2. Their ability to take risk is much greater. When you are young, single and unattached, your ability to take risk is much larger, than when you have a mortgage, kids, hospital bills etc. The worst thing that happens is that you fail and get acquired by a larger company.

3. Time is on their side. Most mid-career executives wanting to start a company are fighting the lack of time on their side. It is NEVER too late to start a company, but if you measure the number of mistakes per unit time you make, then student entrepreneurs clearly have more chances to fail and finally succeed.

I truly believe that students are going to be the largest part of entrepreneurs in India in a few decades. Until then we have Microsoft Innovation centers and NEN to show us how to get them motivated, excited and focused on building their venture.

Shout out to my friend, advisor, guide and awesome student entrepreneurship champion Sri Krishna of NEN. He is the person to connect with in India for all things student startups related.

#Biotech park in Bangalore

Quick note. I was invited to the Biotech park launch in Bangalore yesterday. This is a 56 acre piece of land to help Biotech startups in Bangalore. There is significant money being spent by both the state and central governments (approx $8 Million) to help startups in Bangalore.

The talent pool from BioGen, NCBS, Instem and others in Bangalore is large enough to support 20-30 startups each year is the thinking in Bangalore.

The space walk through was a 3D video. It was really cool. Loved it. Photos coming soon.

The #Kolkata startup ecosystem as seen through the eyes of #tiecon 2014

I had the opportunity to visit Kolkata and judge the #TieCon Kolkata startup pitches last month. As a background, I have been visiting Kolkata for the last 5 years, every year, during January, for various entrepreneur events, at times running a day long workshop on Sales and other times trying to motivate promising startups to apply to the Microsoft Ventures accelerator.

The Kolkata startup ecosystem gets largely ignored since larger and younger cities are making the right moves, quicker, but there are some very interesting companies that come from the city and the greater part of Eastern India. One of our accelerator companies, TookiTaki, is from Kolkata as well.

The city has a very vibrant ad-tech, marketing technology and digital agency market. Over 20 digital agencies and technology companies are based in Kolkata and some of them are doing over $5 Million in revenue each year for the last 5 years. A strong creative, design and literary talent pool contributes to the local startup scene. Check out IndusNet, A1 Future technology, Exactlly and Arun Agarwal for more about the local ecosystem.

The TIECon Kolkata, though surprised me with its turnout. To give you some context, most entrepreneur events in Kolkata, over the last few years, have featured about 80 to 100 attendees. This conference had over 550 paid registrations and nearly 100+ volunteers. I think it is time to start taking them a little more seriously than before. While I did not get the deep technology companies there, I got many interesting companies that investors might want to take a closer look.

The TIECon event had a startup pitch session the day before the event and there were 15 companies shortlisted of about 50 applicants. About half of them were not technology companies with the likes of a speech and hearing clinic, a aloe vera lotion and beauty company and also a women’s high street fashion company, Miss Chase,  founded by Ananya, who previously founded SoSasta (sold to GroupOn a few years ago).

Here were the most interesting companies you should look out for in the next few years, in no particular order.

1. Betaglide: The winner of the IIT KGP startup pitch, this company is fairly similar to Little eye labs, which was acquired by facebook recently. They provide mobile app developers analytics and data from their users and their usage to help get your mobile app ready beyond beta. Good team, little early traction, but I think they need more time to get their product to MVP.

2. FlyMyFood: An interesting eCommerce company, which has already reached INR 20K in revenue per day after 2 months in business. They offer delectable food from various locations – think Hyderabadi biryani from Paradise Food Court and fruit biscuit from Karachi bakery, from the comfort of your home, the same day. Since they feature top brands from various cities, those brands that have a following will help them grow, but this company is a logistics nightmare. Interesting to see if they end up focusing on snacks instead of lunch / dinner though, which was my suggestion.

3. KarmYog: They help bring education to the masses with music, arts and media. They have a partnership with Indian Idol and others as well, to help students and older adults learn via music and arts. Interesting idea, but still a long way to go to prove there’s a business here.

4. Zostel: They are a hostel for backpackers. They have 2 locations in Jaipur and Jodhpur where you can get dorm style rooms for young backpackers who want to travel on a budget. Overnight stay begins at INR 400 per day, for which you get a bed and breakfast with a cool eclectic ambiance and decor. This was too much of an “offline” company for me to get interested, but there are 7 founders from IIM Cal who have all committed to this venture.

5. Quikvisor: Think of this like Uber, but for doctors. If you are in need of a general physician referral or need a pediatrician quickly you go to this mobile app and based on your insurance, location, etc. they will connect you with a consulting physician for $X / 15 minutes, using facetime, instead of a physical appointment. Interesting idea, focused on the US market, but I think the market is possibly bigger for a second opinion platform, than a referral.

6. Chitkara University: Blind-assist glove. This was the most intriguing. This student startup makes a glove (hand glove) which has multiple sensors that helps the blind, using haptic technology to provide sensor based information on whether they are coming close to a stair, are the stairs going up or down, if there is movement around them, etc. The sensors (5, one for each finger) are connected to an Ardunino platform, which is their primary processing engine as well. I saw a video demo, of the product, not a live one and if the video does half as much as the entrepreneur says it does, this one will be a clear winner.

7. SakRobotix: They offer online education and kits to help students and young kids learn to build robots. Not a company that will possibly scale, but I LOVE anyone that teaches something meaningful to young minds to help them appreciate technology.

Overall, I loved being in Kolkata, primarily because I have many good friends there. They are the most hospitable people and they love it when anyone from other ecosystems comes there to meet and learn from their startups. As an added bonus I had a traditional breakfast at my friend Abhishek Rungta‘s home. If you ever go to Kolkata, and want to meet startups give him a holler.

Some exciting startups in the HealthTech Space #health2india

James Matthews, a good friend and entrepreneur invited me to attend the Health 2.0 Conference for entrepreneurs and healthcare professionals today and speak about Health Tech investments. About 80 to 100 folks were in attendance, featuring about 30 entrepreneurs, 25 investors and the others were from Pharma companies, Hospitals and diagnostics chains.

Our panel featured an entrepreneur (Poonacha), a healthcare product company (GE) VP (Partha) and Ravi from Zanec.

There were 4 startups that were allowed to pitch the investors, and while there was no commitment from the investors, the startups were not looking to raise immediately either. This was a session for them to get some feedback from potential investors.

There are 3 high level observations that relate to investing and entrepreneurship in the space that I want to highlight first and then talk about the interesting companies.

1. Older Indians overall have little respect for preventive healthcare or do not value it at all. If you are in the wellness space or “be healthy” space, the market will be relatively small is what I gathered. I hear many entrepreneurs say their target market is 25-40 year olds. I think the real market for wellness products, services and solutions is 25-30 year old’s. How can I prove that? Look at gym membership in India. There are 70K members for the 300+ gyms and the prices are fairly high. Why? Because gyms are a luxury item in India. The average cost of a membership is between INR 500 per month (non chain) to about INR 4000 (Gold’s gym). It is not that older Indians dont want to live healthy. They think that paying for “wellness” is overrated.

2. Going after solutions for doctors, clinics or hospitals is a curse from hell for startups. Most smart entrepreneurs are focusing on the patient (consumer) via the influencer (doctor). Which means that for healthtech startups, distribution and sales are less of an issue, but consumer adoption and more importantly usage is more critical. Most consumers in India dont have the discipline to master wellness and focus on preventive health choices, and the ones that do are far and few between.

3. Indian doctors see almost 2-3 times the number of patients a day as American doctors do, and still make 1/3 as much them. Solutions to make doctors more productive by educating patients, transferring more work to nurses, etc. will likely do well.

Here are the 7 interesting companies I met at the conference today, and here is a summary, in the order of when I met them.

1. Diabeto: is a diabetes management analytics application and device. It transfers your glucose readings from your Glucometer into your smartphone and cloud so your caregiver can monitor it. Rather than do a lot of automation, which will force the company to get an FDA approval, they do just enough. Very interesting company and a neat product and they have many inquiries from distributors from other countries. The global diabetes care market is fairly large so I think they are on their way to raise some amount of early seed funding.

2. Zest.MD: is an online clinic for nutritionists. The SaaS solution helps bring any nutritionists services online so consumers can review and purchase via the web. Longer term the company is looking to be a curated marketplace for people wanting to make healthy choices. I thought this was fairly good, but I am still skeptical of the size of this market.

3. Praxify: is a connected patient records management for doctors and patients. They were positioned as an EMR (Electronic Medical Records) but the market for that is long gone and dead. The average doctor hates using the EMR product and the patients dont understand its benefit enough. Good team and product, so this is a company to watch. Disclosure: they are a Microsoft Ventures company.

4. Fitternity: is a directory, content website, ecommerce platform and database for people wanting to be healthy. The product is aimed at people who care about being fit, by offering advice, products and service referrals. I have seen many such offerings, so I am not sure what their differentiation is.

5. Care Companion: is a education tool for care-givers: nurses, wives, parents, etc. Since doctors dont have time to explain the same things to each patient’s care givers, this product aims to provide the standard advice my means of videos. E.g. Assume that your child, after a doctor’s visit has to to avoid certain foods, take pills in the morning and night, but not afternoon, etc. this product will provide those simple instructions by disease or symptom.

6. Cyber Liver: They provide a breathalyzer which nudges you to avoid drinking too much alcohol. This is a extension (hardware) to your iPhone or Android phone that you breath into every time you drink. It keeps track of how much you drink each week and uploads that to the cloud, ensuring that you know if you had too much to drink. Very interesting idea, but users have to remember to breath into the device after they consume alcohol each time, and I don think they will do this often enough to make a difference.

7. mTatva: is a prescription transcription and alerting tool. Your prescription is scanned at the hospital to the cloud and your dosage and medicines are sent by SMS. Then it also send the prescription to your favorite pharmacist via SMS and will alert you each day and time with the dosage information. I liked the idea, but adoption is currently sparse.

There were a few other companies, measuring (using multiple sensors) the weight of your pill box to intelligently alert you when you dont take your medicines, etc.

Overall the signal to noise ratio at this event was VERY high. James has curated an excellent set of entrepreneurs and I was pleased to see such a diverse set of folks innovating in Heath Tech.

How much should you pay for an engineer / developer in #Bangalore? Winter 2013 edition

Many entrepreneurs from outside Bangalore and larger company VP’s of Engineering from the US, who wish to relocate often ask me this question – How much should I pay developers / engineers in Bangalore?

That is a very tough question to answer overall, but I have noticed some patterns based on working with many startups here and also have the information on the salary bands for several large technology companies here in Bangalore.

The best way to think about how much to pay is by giving salary bands and considering the parameters.

There are 3 primary parameters I have seen used when people hire folks to determine their salary.

1. Experience – usually measured in # of years working on relevant and related technologies. A rule of thumb I have seen is 1.2 to 1.5 times the number of years of experience + starting salary of a fresh graduate at 2L ($3K) per year to 6L ($10K) per year. For example, if you are looking to hire a developer with 5 years of experience, then you will pay 5 years times 1.2 plus 2L per year if you are a startup that’s not funded.

2. Type of technology – The more arcane the technology the more you can expect to pay for it. For example, you can expect to pay much less for a person who knows PHP and more for someone who knows Android app dev or Ruby on Rails. Some common technologies and your base times multiple is below. I am assuming php developer is the base at Rs. 1. All others are multiple of what you’d pay the php developer. I dont mean this to think of php developers as bottom of the pool, but that’s the most prevalent skill, so the supply of engineers is more than the demand, making it a skill that’s easiest to hire and least expensive as well.

a) php developer = 1

b) Javascript + HTML (front end) = 0.9 – 1.2

c) Ruby = 1.2 – 1.5

d) Python = 1.4 – 1.7

e) Android = 1.3 – 1.8

f) iOS = 1.4 – 1.9

3. Stage of company. Generally a company, which is bootstrapped pays less and one that is funded pays more. Larger the company, the more you are likely to pay, If the unfunded company pays INR 1, then I have seen number of upto 2.3 times that being paid by larger technology companies.

So, if you are looking to hire a developer or a team, how do you decide how much to pay?

Step 1: Start with fresh graduates at 2L ($3K) per year if you are a new startup and go up to INR 6L ($10K) if you are a larger established company in the US for the same fresh graduate.

Step 2: For people with experience, expect to pay 1.2 times their # of years of experience added to their salary. So someone with 2 years experience would get 2.4 (1.2 times 2) + 2L to 10K depending on your company size.

Step 3: Finally depending on your technology stack add the multiplier above. So if you are looking to hire a Ruby on Rails developer with 2 years experience for a startup, then:

(2L (fresh grad at an unfunded startup) + 2.4L (for 2 years experience) ) * 1.2 (for Ruby) = ~5 to 6L per year or about $9K to $10K.

Two other points, that are VERY important.

1. To determine if the person is *good* I’d recommend you get them on board for a week to a month before you hire. Don’t use this formula blindly and pay a person who is not good a boatload of money to get disappointed.

2. Most people use salary at the previous job plus a 20-50% uplift (or raise). I think that works for most, but if you have a superstar candidate I’d go back to this formula.

P.S. There’s no good way to determine a good candidate except working with them. I dont take reference checks in India seriously – more on that for another post. I prefer recommended candidates from people I know very well.

Are there too few seed/angel investors in India or is too much money chasing too few great companies?

This is a debate that I keep having with entrepreneurs and investors alike. When you talk to entrepreneurs they correctly point out the # of angel and seed deals done in India are very few. If you remove accelerators, the number of angel funded tech companies in India is about 60 (2013) and the number of Venture deals, which are about 50. Add the accelerators, which add another 60 companies and we have about 150 startups getting funded each year.

Given the number of entities that get started is about 1000 (2013), that seems like a small number. Entrepreneurs also point out the very investor friendly terms (drag along, liquidation preferences) that are given by angels in India and the fact that most angel funded companies give between 20 and 30% of their equity at the seed / angel round, which are common among technology startups.

On the other side, Venture and angel investors point out the relatively few exits (fewer than 10 in the technology sector) and the amount of time it takes to grow companies in India (over 10 years). They believe there is enough money for the right opportunities. I can point to 2 examples of companies we are trying to fund which have 3 competing term sheets at the angel investment stage to confirm that it happens, but is rare.

Which brings me to accelerators such as ours. There are about 30+ accelerators in India, but I am going to focus on the top 5. In discussions with other accelerators, the constant theme I get from most folks is the intense focus on the part of entrepreneurs to “get funded”. First the angel round, then the sapling round and then the series A. I know in our own case that is true.

So let me talk about our case in particular, although I have mentioned it before. We dont want to focus on funding. If that’s the biggest need of entrepreneurs then they should go elsewhere.

Unlike other accelerators which are not a corporate program, the key value to Microsoft from our program is startup engagement. We take pride in engaging with the startups and are extremely happy if they are successful, but the financial return from our investment is going to be largely negligible to us. Even if 1 of the 11 startups “makes it big” and we owned 6-10% of the company when it went IPO or got acquired, it would not be a significant dent to Microsoft by any means.

We had a chance to review about 800+ applicants this batch 4 for our accelerator. There were many great entrepreneurs and companies, but we could only support 10 – 15. If we were running a fund, similar to a venture investor, we would only select 2 or maybe 3. That’s consistent with our previous batches.

That we believe is a great disservice to the entrepreneur ecosystem. Many more companies could be small, non angel / VC funded businesses, and still do well. I do not like the term “lifestyle” businesses, but these companies do not warrant the money required by rapid growth, quick to scale companies.

So we do not put a lot of emphasis on our companies getting funded. We do help them get connected with angel investors and venture capitalists, but that’s it. In many cases we have worked behind the scenes to push investors we know to get deals done faster and at better terms, but that’s largely behind the scene. Our emphasis is to open doors and opportunities that help them get in front of other entrepreneurs, potential customers and partners and help them understand the discipline that it takes to be a great entrepreneur.

A few of our previous company entrepreneurs dont like that, and we don’t have a problem with that. Our goal is to help the ecosystem grow and allow more entrepreneurs to experience the journey. If they only wish to focus on funding, they are better off going elsewhere.

So, back to the question: Are is there too little risk capital in technology or too much money chasing too few deals?

Unfortunately the answer is clear only from the perspective that you are coming from. Neither entrepreneurs nor investors will be able to see the challenges the other side faces very easily so it is a question that quite possibly has no clear answer.

The best is to keep at the problem and have different parts of the puzzle try and fit themselves as they progress instead of force fitting more funding into companies or the other way around.

The other part of the question comes from the seed fund that we have as part of Microsoft Ventures. We have not invested in any company, in India, so far, but we have 2 in the pipeline. We get questions on why we dont fund all the companies from the accelerator.

The answer is fairly straightforward but very hard for entrepreneurs to swallow in India.

Microsoft Ventures fund is global. Which means we look at opportunities in the US, Israel, China and other locations. We have some fairly standard criteria for our funding – including, but not limited to the following:

1. We only have the authority to put money in a US or UK entity.

2. We can only use a convertible note instrument.

3. We need to have the company’s product’s well aligned with internal Microsoft teams / products and goals.

The accelerator, however, does not have the strict guidelines associated with these 3 criteria.

Finally since we fund all companies globally, the investment committee looks at all companies across multiple geographies and “looks” for traction, differentiation and other metrics and our companies are just not as strong as those in Israel or the US. They seem to need a lot more time, same amount of money, with potentially smaller exits. While that’s the nature of the maturity of our startups in India, that’s not a bad thing overall. We will get there eventually is my perspective.

Until then we have to fight battles on why we should fund a company from India, when the comparable company in the US is much further along.

The argument for China is simple – a US company just does not do as well in China as a Chinese company.

The arguments for a Israeli company are great as well – most of their companies are Delaware entities, have extremely strong technology (which is aided by government) and they have at least 100% more traction (customers, revenue) than comparable Indian companies.

What do you think? I’d love your perspective on what I am missing.